Monday, July 07, 2014

Intellectuals Are Bad Luck

First we learn a little about intellectuals:
Further to Joe Salerno’s post on “Hayek and the Intellectuals,” it’s worth adding that Hayek was not alone in thinking of the intellectual class as naturally hostile to the market economy. In particular, there are many similarities between Hayek’s ideas and those found in Schumpeter’s “Sociology of the Intellectuals.”

Schumpeter famously argued in Capitalism, Socialism, and Democracy (1942; three years before Hayek’s essay) that the entrepreneurial economy creates wealth and improves social conditions to such an extent that it eventually undermines itself and is replaced with socialism. Entrepreneurs are so successful that people take them for granted; in fact, people resent entrepreneurship and innovation, because the constant transformation of the economy gives them feelings of instability and uncertainty.
That takes us to a Heinlein quote to which Instapundit periodically refers:
“Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded—here and there, now and then—are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

This is known as ‘bad luck’.”


KauaiMark said...

"...opposed by all right-thinking people"

Should be "left-thinking people"?

maxutils said...

Well ... there is merit to this idea. We let the rich/ privileged have access to bonuses not obtained by others ... so they have no reason to share the wealth. And if they make bad decisions, government bails them out. That is NOT the free market, and it breeds people who want socialism ... which is worse.

allen (in Michigan) said...

Max, everybody wants socialism.

Until they grow up. Some people refuse to grow up so never outgrow their fondness for the state which they believe should be a replacement for their imperfect parents.

Wealth makes it easier to refuse to grow up since money bandages quite a few of life's boo-boos and can get you out of quite a few scrapes without leaving enough of a mark to unalterably remind you of your own mortality. America's the wealthiest nation the history's ever seen so something out of the common ought to be expected.

But I'm a cockeyed optimists, as I've admitted before, so I've decided to believe that as a free people we'll indulge ourselves with the seductive charms offered by socialism but will also, ultimately, reject socialism.

maxutils said...

allen, please don't put words in my mouth ... I never really thought about economics, socialism or capitalism, until, oddly, I took my first course in it ... I just appreciated the way my economy seemed to work, and how others seemed not to, at least not as well ...lines for bread? I certainly don't want that. Taking a VERY good econ class my junior year of high school, I took away at least 3 good lessons ... that the free market is preferable as an ideal; that despite that, it doesn't always work out for society, at least not optimally; and therefore, the trick is to minimize government intervention to the few instances where the market doesn't work so well. I also learned about Marxism and socialism ... but by doing so, I also learned that the first is at best, self annihilating and the second is guaranteed to be inefficient. However, if you truly believe in a free-ish market, you should champion against corporate welfare and tax breaks to the rich. And we need to start to be transparent about them, and not hide taxes every which way ... I mean, when Romney and Obama released their tax records, sure, Romney had a lower RATE...he also paid taxes and gave to charity at least an order of magnitude greater than Obama. I'm not suggesting a flat rate tax, but I am suggesting that each dollar earned in each bracket should be taxed at the same rate, with some sort of cap. And then have no other taxes or fees. GE has paid nothing in taxes ... poor people pay a very high effective tax rate, but we can say that they don't pay income tax, because technically they may not ... but, how is FICA not an income tax? It comes out of your paycheck and goes to the government. Add to that property tax, which for the poor is hidden in their rent, sales tax, gasoline tax ... that's not a free market. Corporate welfare and accounting tricks make it worse. And trying to get rid of them does not make one a 'socialist' -- quite the opposite. When the Federal Government bailed out the auto industry, and the banking industry, that was literal socialism: essentially, government owning productive resources. National health care isn't literally that, but it might as well be. And I think I've been fairly consistent in opposing all those things ... even when I was back in high school at 16, and didn't know they were to happen.

maxutils said...

Except for Harley Davidson ...they came to the Feds for a loan to help them compete against the influx of Japanese motorcycles, despite the fact that their product was good. They paid it back in full, and are now entirely successful. Which is very different from the failing companies we bailed out because their products weren't good ... especially the banking industry, where almost none of the money given them made it down to the people there horrible loan practices hurt.

Ellen K said...

We have a generation running things that never read The Little Red Hen or The Goose That Laid the Golden Egg. They have no concept that wealth is anything but never-ending. And then they put in measures that kill the source. Every single time.